NEW YORK — Dennis Muilenburg will no longer serve as Boeing's CEO and the Board director, the company announced Monday.
Chief Financial Officer Greg Smith will serve as interim CEO until Chairman David Calhoun becomes the permanent CEO on Jan. 13.
Though the company is calling it a resignation, The New York Times is reporting Muilenburg was fired.
Boeing said it decided it needed new leadership to regain the confidence of regulators. The company — which has been criticized over the design of the Max, Boeing’s failure to tell pilots about a new flight-control system on the plane, and its handling of the crisis after the first crash — promised a “renewed commitment to full transparency.”
The Boeing board had supported Muilenburg for months despite calls for his resignation from lawmakers and relatives of the passengers killed. When it became clear in recent days that federal regulators would not certify the grounded Max to fly again by year’s end as Muilenburg had hoped, the board finally abandoned him.
Board members decided to remove him on a conference call Sunday, according to a person familiar with the events who discussed the private deliberations on the condition of anonymity.
"I strongly believe in the future of Boeing and the 737 MAX. I am honored to lead this great company and the 150,000 dedicated employees who are working hard to create the future of aviation," Calhoun said in a prepared statement.
Additionally, Board member Lawrence Kellner will become the non-executive chairman of the Board.
Muilenburg previously lost his title as chair of the aircraft manufacturer, nearly a year after the first of two crashes of its 737 MAX that together killed 346 people. The company announced it would separate the two jobs and elected Calhoun to serve as the non-executive chair. Muilenburg said in a statement that he supported splitting the CEO and chairman jobs.
"The leadership changes announced today by Boeing are a step in the right direction. The Boeing Company has long been a world leader in both breakthrough engineering and the highest standards in aviation safety. Under Dennis Muilenberg that reputation for quality has been unquestionably tarnished. The roughly 20,000 engineers and technical workers represented by our union at Boeing are committed to reestablishing Boeing’s leading role in commercial aviation, defense and space flight. We look forward to working with current Chairman and incoming CEO David Calhoun," the IFPTE union said in a statement. IFPTE is the union that represents engineers and technical workers at the Boeing company.
Aviation Industry Consultant Scott Hamilton said he was not surprised by the departure but shocked by the timing. “Just this plethora of stuff that has gone on that he had to go,” he explained.
Hamilton believes the focus needs to be getting the Max re-certified. “If this shutdown goes on for a very long time this could have a really bad effect for the Puget Sound region.”
Hamilton believes Muilenburg’s departure will help the situation.
“Clearly, the relations between the Federal Aviation Administration and Boeing, with Muilenberg being the face Boeing, have just deteriorated greatly,” he explained.
The MAX was Boeing's best-selling plane until being grounded worldwide in March after crashes in Indonesia and Ethiopia. The company has set aside billions to compensate airlines affected by the grounding.
Earlier this month, the House Transportation Committee disclosed an internal FAA analysis made after the first crash, which estimated that there would be 15 more fatal crashes over 45 years until Boeing fixed its new automated MCAS flight-control system. The FAA did not ground the plane until the second crash.
The company announced it will temporarily halt production of the 737 Max in January as the fleet remains grounded. The company said no layoffs or furlough were expected at this time.
Boeing's troubled 737 Max airplanes won't be cleared for flight until 2020 at the earliest, the head of the Federal Aviation Administration said on December 11.